Exhibit 10.21
AMERICAN HEALTHCORP, INC.
1996 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the American Healthcorp, Inc. 1996 Stock Incentive Plan
(the "Plan") is to enable American Healthcorp, Inc. (the "Corporation") to
attract, retain and reward key employees of and consultants to the Corporation
and its Subsidiaries and Affiliates, and directors who are not also employees of
the Corporation, and strengthen the mutuality of interests between such key
employees, consultants and directors by awarding such key employees, consultants
and directors performance-based stock incentives and/or other equity interests
or equity-based incentives in the Corporation, as well as performance-based
incentives payable in cash. The creation of the Plan shall not diminish or
prejudice other compensation programs approved from time to time by the Board.
For purposes of the Plan, the following terms shall be defined as set
forth below:
A. "Affiliate" means any entity other than the Corporation and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Corporation directly or indirectly owns at least 20%
of the combined voting power of all classes of stock of such entity or at least
20% of the ownership interests in such entity.
B. "Board" means the Board of Directors of the Corporation.
C. "Common Stock" means the Corporation's Common Stock, par value $.001
per share.
D. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
E. "Committee" means the Committee referred to in Section 2 of the
Plan.
F. "Corporation" means American Healthcorp, Inc., a corporation
organized under the laws of the State of Delaware or any successor corporation.
G. "Disability" means disability as determined under the Corporation's
long-term disability insurance policy.
H. "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the Securities and Exchange Commission
("Commission") under the Securities Exchange Act of 1934, as amended, or any
successor definition adopted by the Commission.
I. "Early Retirement" means retirement, for purposes of this Plan with
the express consent of the Corporation at or before the time of such retirement,
from active employment with the Corporation and any Subsidiary or Affiliate
prior to age 65, in accordance with any applicable early retirement policy of
the Corporation then in effect or as may be approved by the Committee.
J. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
K. "Fair Market Value" means with respect to the Stock, as of any given
date or dates, unless otherwise determined by the Committee in good faith, the
reported closing price of a share of such class of Stock on The Nasdaq Stock
Market ("Nasdaq Stock Market") or such other exchange or market as is the
principal trading market for such class of Stock, or, if no such sale of a share
of such class of Stock is reported on the Nasdaq Stock Market or other exchange
or principal trading market on such date, the fair market value of a share of
such class of Stock as determined by the Committee in good faith.
L. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
M. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
N. "Normal Retirement" means retirement from active employment with the
Corporation and any Subsidiary or Affiliate on or after age 65.
O. "Other Stock-Based Award" means an award under Section 8 below that
is valued in whole or in part by reference to, or is otherwise based on, Stock.
P. "Outside Director" means a member of the Board who is not an officer
or employee of the Corporation or any Subsidiary or Affiliate of the
Corporation.
Q. "Outside Director Restricted Stock" shall have the meaning provided
in Section 9.
R. "Plan" means this American Healthcorp, Inc. 1996 Stock Incentive
Plan, as amended from time to time.
S. "Restricted Stock" means an award of shares of Stock that is subject
to restrictions under Section 7 below.
T. "Restriction Period" shall have the meaning provided in Section 7.
U. "Retirement" means Normal or Early Retirement.
V. "Stock" means the Common Stock.
W. "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Corporation all (or a portion)
of a Stock Option in exchange for an amount equal to the difference between (i)
the Fair Market Value, as of the date such Stock Option (or such portion
thereof) is surrendered, of the shares of Stock covered by such Stock Option (or
such portion thereof), subject, where applicable, to the pricing provisions in
Section 6(b)(ii), and (ii) the aggregate exercise price of such Stock Option (or
such portion thereof).
X. "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock, if the Committee so determines) granted
pursuant to Section 5 below.
Y. "Subsidiary" means any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
2
In addition, the terms "Change in Control," "Potential Change in
Control" and "Change in Control Price" shall have the meanings set forth,
respectively in Sections 10(b), (c) and (d) below and the term "Cause" shall
have the meaning set forth in Section 5(j) below.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by a Committee of not less than two
Disinterested Persons, who shall be appointed by the Board and who shall serve
at the pleasure of the Board. The functions of the Committee specified in the
Plan may be exercised by an existing Committee of the Board composed exclusively
of Disinterested Persons. The initial Committee shall be the Compensation
Committee of the Board.
The Committee shall have authority to grant, pursuant to the terms of
the Plan, to officers, other key employees and consultants eligible under
Section 4: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
Stock, and/or (iv) Other Stock-Based Awards.
In particular, the Committee shall have the authority, consistent with
the terms of the Plan:
(a) to select the officers and other key employees of and
consultants to the Corporation and its Subsidiaries and Affiliates to
whom Stock Options, Stock Appreciation Rights, Restricted Stock, and/or
Other Stock-Based Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, and/or Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder to one or more eligible employees;
(c) to determine the number of shares to be covered by each
such award granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including,
but not limited to, the share price and any restriction or limitation,
or any vesting acceleration or waiver of forfeiture restrictions
regarding any Stock Option or other award and/or the shares of Stock
relating thereto, based in each case on such factors as the Committee
shall determine, in its sole discretion); and to amend or waive any
such terms and conditions to the extent permitted by Section 11 hereof;
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash or Restricted Stock under Section 5(m) or
(n), as applicable, instead of Stock;
(f) to determine whether, to what extent and under what
circumstances Option grants and/or other awards under the Plan are to
be made, and operate, on a tandem basis vis-a-vis other awards under
the Plan and/or cash awards made outside of the Plan;
(g) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining
the amount (if any) of any deemed earnings on any deferred amount
during any deferral period); and
(h) to determine whether to require payment withholding
requirements in shares of Stock.
The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan
3
and any award issued under the Plan (and any agreements relating thereto); and
to otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Corporation and Plan participants.
Notwithstanding the foregoing, the Committee shall have no authority to
determine the terms or conditions of awards to Outside Directors, which shall be
governed solely by Section 9 hereof.
SECTION 3. SHARES OF STOCK SUBJECT TO PLAN.
The aggregate number of shares of Stock reserved and available for
distribution under the Plan shall not exceed 1,980,000 shares, which includes
50,000 shares reserved for issuance pursuant to Section 9 hereof. Any number of
shares of Stock may be awarded so long as the total shares of Stock awarded does
not exceed 380,000 shares. Such shares of Common Stock may consist, in whole or
in part, of authorized and unissued shares or treasury shares.
If any shares of Stock that have been optioned cease to be subject to a
Stock Option, or if any shares of Stock that are subject to any Restricted Stock
or Other Stock-Based Award granted hereunder are forfeited prior to the payment
of any dividends, if applicable, with respect to such shares of Stock, or any
such award otherwise terminates without a payment being made to the participant
in the form of Stock, such shares shall again be available for distribution in
connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, Stock dividend, Stock split or
other change in corporate structure affecting the Stock, an appropriate
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding Options granted under the Plan, and in the number of
shares subject to other outstanding awards granted under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
Such adjusted option price shall also be used to determine the amount payable by
the Corporation upon the exercise of any Stock Appreciation Right associated
with any Stock Option. The maximum number of shares that may be awarded to any
participant under Section 4 of this Plan will be adjusted in the same manner as
the number of shares subject to outstanding Options.
SECTION 4. ELIGIBILITY.
Officers and other key employees of and consultants to the Corporation
and its Subsidiaries and Affiliates (but excluding members of the Committee and
any person who serves only as a director, except as otherwise provided in
Section 9) who are responsible for or contribute to the management, growth
and/or profitability of the business of the Corporation and/or its Subsidiaries
and Affiliates are eligible to be granted awards under the Plan. No officer or
key employee shall be eligible to receive awards relative to shares of Stock
which exceed 150,000 shares during any consecutive 3-year period.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
Any Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve.
4
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Corporation or any
Subsidiary of the Corporation.
The Committee shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options (in each case with or without Stock Appreciation Rights).
Options granted to officers, key employees and consultants under the
Plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant but shall be not less than 100% (or, in the case
of any employee who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or of
any of its Subsidiaries, not less than 110%) of the Fair Market Value
of the Stock at grant, in the case of Incentive Stock Options, and not
less than 50% of the Fair Market Value of the Stock at grant, in the
case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable
more than ten years (or, in the case of an employee who owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation or any of its Subsidiaries or
parent corporations, more than five years) after the date the Option is
granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant; provided, however, that
except as provided in Section 5(g) and (h) and Section 10, unless
otherwise determined by the Committee at or after grant, no Stock
Option shall be exercisable prior to the first anniversary date of the
granting of the Option. The Committee may provide that a Stock Option
shall vest over a period of future service at a rate specified at the
time of grant, or that the Stock Option is exercisable only in
installments. If the Committee provides, in its sole discretion, that
any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time at or after
grant in whole or in part, based on such factors as the Committee shall
determine, in its sole discretion. The Committee may establish
performance conditions or other conditions to the exercisability of any
Stock Options, as determined by the Committee in its sole discretion,
which conditions may be waived by the Committee in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise restrictions apply under Section 5(c), Stock Options may be
exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Corporation specifying the
number of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price, either by check, note or such other instrument as the
Committee may accept. As determined by the Committee, in its sole
discretion, at or (except in the case of an Incentive Stock Option)
after grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the optionee or, in the case of the
exercise of a Non-Qualified Stock Option or Restricted Stock, subject
to an award hereunder (valued at the Fair Market Value of the Stock on
the date the option is exercised, as determined by the Committee). If
payment of the exercise price is made in part or in full with Stock,
the Committee may award to the employee a new Stock Option to replace
the Stock which was surrendered.
5
If payment of the option exercise price of a Non-Qualified
Stock Option is made in whole or in part in the form of Restricted
Stock, such Restricted Stock (and any replacement shares relating
thereto) shall remain (or be) restricted in accordance with the
original terms of the Restricted Stock award in question, and any
additional Stock received upon the exercise shall be subject to the
same forfeiture restrictions, unless otherwise determined by the
Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued until full payment therefor
has been made. An optionee shall generally have the rights to dividends
or other rights of a stockholder with respect to shares subject to the
Option when the optionee has given written notice of exercise, has paid
in full for such shares, and, if requested, has given the
representation described in Section 13(a).
(e) Non-Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee.
(f) Bonus for Taxes. In the case of a Non-Qualified Stock
Option, the Committee in its discretion may award at the time of grant
or thereafter the right to receive upon exercise of such Stock Option a
cash bonus calculated to pay part or all of the federal and state, if
any, income tax incurred by the optionee upon such exercise.
(g) Termination by Death. Subject to Section 5(k), if an
optionee's employment by the Corporation and any Subsidiary or (except
in the case of an Incentive Stock Option) Affiliate terminates by
reason of death, any Stock Option held by such optionee may thereafter
be exercised, to the extent such option was exercisable at the time of
death or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or
except in the case of an Incentive Stock Option, as may be determined
in accordance with procedures established by the Committee) by the
legal representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of one year (or such other
period as the Committee may specify at or after grant) from the date of
such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(h) Termination by Reason of Disability. Subject to Section
5(k), if an optionee's employment by the Corporation and any Subsidiary
or (except in the case of an Incentive Stock Option) Affiliate
terminates by reason of Disability, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it
was exercisable at the time of termination or (except in the case of an
Incentive Stock Option) on such accelerated basis as the Committee may
determine at or after grant (or, except in the case of an Incentive
Stock Option, as may be determined in accordance with procedures
established by the Committee), for a period of (i) three years (or such
other period as the Committee may specify at or after grant) from the
date of such termination of employment or until the expiration of the
stated term of such Stock Option, whichever period is the shorter, in
the case of a Non-Qualified Stock Option and (ii) one year from the
date of termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is shorter, in the case of
an Incentive Stock Option; provided however, that, if the optionee dies
within the period specified in (i) above (or other such period as the
committee shall specify at or after grant), any unexercised
Non-Qualified Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time of
death for a period of twelve months from the date of such death or
until the expiration of the stated term of such Stock Option, whichever
period is shorter. In the event of termination of employment by reason
of Disability, if an Incentive Stock Option is exercised after the
expiration of the exercise period applicable to Incentive Stock
Options, but before the expiration of any period that would apply if
such Stock Option were a Non-Qualified Stock Option, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
6
(i) Termination by Reason of Retirement. Subject to Section
5(k), if an optionee's employment by the Corporation and any Subsidiary
or (except in the case of an Incentive Stock Option) Affiliate
terminates by reason of Normal or Early Retirement, any Stock Option
held by such optionee may thereafter be exercised by the optionee, to
the extent it was exercisable at the time of such Retirement or (except
in the case of an Incentive Stock Option) on such accelerated basis as
the Committee may determine at or after grant (or, except in the case
of an Incentive Stock Option, as may be determined in accordance with
procedures established by the Committee), for a period of (i) three
years (or such other period as the Committee may specify at or after
grant) from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period is
the shorter, in the case of a Non-Qualified Stock Option and (ii) three
months from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period is
the shorter, in the event of an Incentive Stock Option; provided
however, that, if the optionee dies within the period specified in (i)
above (or other such period as the Committee shall specify at or after
grant), any unexercised Non-Qualified Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the
date of such death or until the expiration of the stated term of such
Stock Option, whichever period is shorter. In the event of termination
of employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise period applicable to
Incentive Stock Options, but before the expiration of the period that
would apply if such Stock Option were a Non-Qualified Stock Option, the
option will thereafter be treated as a Non-Qualified Stock Option.
(j) Other Termination. Subject to Section 5(k), unless
otherwise determined by the Committee (or pursuant to procedures
established by the Committee) at or (except in the case of an Incentive
Stock Option) after grant, if an optionee's employment by the
Corporation and any Subsidiary or (except in the case of an Incentive
Stock Option) Affiliate is involuntarily terminated for any reason
other than death, Disability or Normal or Early Retirement, the Stock
Option shall thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the lesser of
three months or the balance of such Stock Option's term if the
involuntary termination is without Cause. For purposes of this Plan,
"Cause" means (i) a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or (ii) a
participant's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Corporation or
any Subsidiary or Affiliate. If an optionee voluntarily terminates
employment with the Corporation and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate (except for Disability,
Normal or Early Retirement), the Stock Option shall thereupon
terminate; provided, however, that the Committee at grant or (except in
the case of an Incentive Stock Option) thereafter may extend the
exercise period in this situation for the lesser of three months or the
balance of such Stock Option's term.
(k) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
No Incentive Stock Option shall be granted to any participant
under the Plan if such grant would cause the aggregate Fair Market
Value (as of the date the Incentive Stock Option is granted) of the
Stock with respect to which all Incentive Stock Options issued after
December 31, 1986 are exercisable for the first time by such
participant during any calendar year (under all such plans of the
Company and any Subsidiary) to exceed $100,000.
To the extent permitted under Section 422 of the Code or the
applicable regulations thereunder or any applicable Internal Revenue
Service pronouncement:
7
(i) if (x) a participant's employment is
terminated by reason of death, Disability or Retirement and
(y) the portion of any Incentive Stock Option that is
otherwise exercisable during the post-termination period
specified under Section 5(g), (h) or (i), applied without
regard to the $100,000 limitation contained in Section 422(d)
of the Code, is greater than the portion of such Option that
is immediately exercisable as an "Incentive Stock Option"
during such post-termination period under Section 422, such
excess shall be treated as a Non-Qualified Stock Option; and
(ii) if the exercise of an Incentive Stock Option
is accelerated by reason of a Change in Control, any portion
of such Option that is not exercisable as an Incentive Stock
Option by reason of the $100,000 limitation contained in
Section 422(d) of the Code shall be treated as a Non-Qualified
Stock Option.
(l) Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash, Stock or Restricted Stock an Option
previously granted, based on such terms and conditions as the Committee
shall establish and communicate to the optionee at the time that such
offer is made.
(m) Settlement Provisions. If the option agreement so provides
at grant or (except in the case of an Incentive Stock Option) is
amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to the spread value of an exercised
Option take the form of Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value (as determined
by the Committee) of such Restricted Stock determined without regards
to the forfeiture restrictions involved.
(n) Performance and Other Conditions. The Committee may
condition the exercise of any Option upon the attainment of specified
performance goals or other factors as the Committee may determine, in
its sole discretion. Unless specifically provided in the option
agreement, any such conditional Option shall vest immediately prior to
its expiration if the conditions to exercise have not theretofore been
satisfied. The shares of Common Stock acquired pursuant to any
conditional Option shall not be transferable by an Optionee subject to
Section 16(a) of the Exchange Act within six months of the date such
Option first becomes exercisable.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of the grant of such
Stock Option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, subject to such
provisions as the Committee may specify at grant where a Stock Appreciation
Right is granted with respect to less than the full number of shares covered by
a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject to
Section 6(b), in accordance with the procedures established by the Committee for
such purpose. Upon such exercise, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options
relating to exercised Stock Appreciation Rights shall no longer be exercisable
to the extent that the related Stock Appreciation Rights have been exercised.
8
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:
(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Stock Options to
which they relate shall be exercisable in accordance with the
provisions of Section 5 and this Section 6 of the Plan; provided,
however, that any Stock Appreciation Right granted to an optionee
subject to Section 16(a) of the Exchange Act subsequent to the grant of
the related Stock Option shall not be exercisable during the first six
months of its term. The exercise of Stock Appreciation Rights held by
optionees who are subject to Section 16(a) of the Exchange Act shall
comply with Rule 16b-3(e) thereunder, to the extent applicable. In
particular, such Stock Appreciation Rights shall be exercisable only
pursuant to an irrevocable election made at least six months prior to
the date of exercise or within the applicable ten business day "window"
periods specified in Rule 16b-3(e)(3).
(ii) Upon the exercise of a Stock Appreciation Right,
an optionee shall be entitled to receive an amount in cash and/or
shares of Stock equal in value to the excess of the Fair Market Value
of one share of Stock over the option price per share specified in the
related Stock Option multiplied by the number of shares in respect of
which the Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment. When
payment is to be made in shares, the number of shares to be paid shall
be calculated on the basis of the Fair Market Value of the shares on
the date of exercise. When payment is to be made in cash, such amount
shall be calculated on the basis of the average of the highest and
lowest quoted selling price, regular way, of the Stock on the Nasdaq
Stock Market or such other exchange or market as is the principal
trading market for the Stock, or, if no such sale of Stock is reported
on such date, the fair market value of the Stock as determined by the
Committee in good faith.
(iii) Stock Appreciation Rights shall be transferable
only when and to the extent that the underlying Stock Option would be
transferable under Section 5(e) of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right,
the Stock Option or part thereof to which such Stock Appreciation Right
is related shall be deemed to have been exercised for the purpose of
the limitation set forth in Section 3 of the Plan on the number of
shares of Stock to be issued under the Plan.
(v) The Committee, in its sole discretion, may also
provide that, in the event of a Change in Control and/or a Potential
Change in Control, the amount to be paid upon the exercise of a Stock
Appreciation Right shall be based on the Change in Control Price,
subject to such terms and conditions as the Committee may specify at
grant.
(vi) The Committee may condition the exercise of any
Stock Appreciation Right upon the attainment of specified performance
goals or other factors as the Committee may determine, in its sole
discretion. Unless specifically provided in the applicable award
agreement, any such conditional Stock Appreciation Right held by a
grantee subject to Section 16(a) of the Exchange Act shall not be
exercisable until the expiration of six months following the
satisfaction of the condition giving rise to such Stock Appreciation
Right.
9
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be issued either
alone, in addition to or in tandem with other awards granted under the Plan
and/or cash awards made outside the Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares of Restricted Stock to be awarded to
any person, the price (if any) to be paid by the recipient of Restricted Stock
(subject to Section 7(b)), the time or times within which such awards may be
subject to forfeiture, and the other terms, restrictions and conditions of the
awards in addition to those set forth in Section 7(c).
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Committee
may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
(b) Awards and Certificates. The prospective recipient of a Restricted
Stock award shall not have any rights with respect to such award, unless and
until such recipient has executed an agreement evidencing the award and has
delivered a fully executed copy thereof to the Corporation, and has otherwise
complied with the applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
established by the Committee and may be zero.
(ii) Awards of Restricted Stock must be accepted within a
period of 60 days (or such shorter period as the Committee may specify
at grant) after the award date, by executing a Restricted Stock Award
Agreement and paying whatever price (if any) is required under Section
7(b)(i).
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of
such participant, and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such award.
(iv) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Corporation until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock
power, endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Section 7 shall be subject to the following restrictions and
conditions:
(i) In accordance with the provisions of this Plan and the
award agreement, during a period set by the Committee commencing with
the date of such award (the "Restriction Period"), the participant
shall not be permitted to sell, transfer, pledge, assign or otherwise
encumber shares of Restricted Stock awarded under the Plan. Within
these limits, the Committee, in its sole discretion, may provide for
the lapse of such restrictions in installments and may accelerate or
waive such restrictions in whole or in part, based on service,
performance and/or such other factors or criteria as the Committee may
determine, in its sole discretion.
(ii) Except as provided in this paragraph (ii) and Section
7(c)(i), the participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the
Corporation, including the right to vote the shares, and the right to
receive any cash dividends. The Committee, in its sole discretion, as
determined at the time of award, may permit or require the payment of
cash dividends to be deferred and, if the Committee so determines,
reinvested, subject to Section 14(e), in additional
10
Restricted Stock to the extent shares are available under Section 3, or
otherwise reinvested. Pursuant to Section 3 above, Stock dividends
issued with respect to Restricted Stock shall be treated as additional
shares of Restricted Stock that are subject to the same restrictions
and other terms and conditions that apply to the shares with respect to
which such dividends are issued. If the Committee so determines, the
award agreement may also impose restrictions on the right to vote and
the right to receive dividends.
(iii) Subject to the applicable provisions of the award
agreement and this Section 7, upon termination of a participant's
employment with the Corporation and any Subsidiary or Affiliate for any
reason during the Restriction Period, all shares still subject to
restriction will vest, or be forfeited, in accordance with the terms
and conditions established by the Committee at or after grant.
(iv) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction
Period, certificates for an appropriate number of unrestricted shares
shall be delivered to the participant promptly.
(d) Minimum Value Provisions. In order to better ensure that award
payments actually reflect the performance of the Corporation and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a restricted stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) Administration. Other Stock-Based Awards, including, without
limitation, performance shares, convertible preferred stock, convertible
debentures, exchangeable securities and Stock awards or options valued by
reference to earnings per share or Subsidiary performance, may be granted either
alone or in addition to or in tandem with Stock Options, Stock Appreciation
Rights or Restricted Stock granted under the Plan and/or cash awards made
outside of the Plan; provided that no such Other Stock-Based Awards may be
granted in tandem with Incentive Stock Options if that would cause such Stock
Options not to qualify as Incentive Stock Options pursuant to Section 422 of the
Code.
Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
awards shall be made, the number of shares of Stock to be awarded pursuant to
such awards, and all other conditions of the awards. The Committee may also
provide for the grant of Stock upon the completion of a specified performance
period.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
(b) Terms and Conditions. Other Stock-Based Awards made pursuant to
this Section 8 shall be subject to the following terms and conditions:
(i) Shares subject to awards under this Section 8 and the
award agreement referred to in Section 8(b)(v) below, may not be sold,
assigned, transferred, pledged or otherwise encumbered prior to the
date on which the shares are issued, or, if later, the date on which
any applicable restriction, performance or deferral period lapses.
(ii) Subject to the provisions of this Plan and the award
agreement and unless otherwise determined by the Committee at grant,
the recipient of an award under this Section 8 shall be entitled to
receive, currently or on a deferred basis, interest or dividends or
interest or dividend equivalents with respect to the number of shares
covered by the award, as determined at the time of the award by the
11
Committee, in its sole discretion, and the Committee may provide that
such amounts (if any) shall be deemed to have been reinvested in
additional Stock or otherwise reinvested.
(iii) Any award under Section 8 and any Stock covered by any
such award shall vest or be forfeited to the extent so provided in the
award agreement, as determined by the Committee, in its sole
discretion.
(iv) In the event of the participant's Retirement, Disability
or death, or in cases of special circumstances, the Committee may, in
its sole discretion, waive in whole or in part any or all of the
remaining limitations imposed hereunder (if any) with respect to any or
all of an award under this Section 8.
(v) Each award under this Section 8 shall be confirmed by, and
subject to the terms of, an agreement or other instrument by the
Corporation and the participant.
(vi) Stock (including securities convertible into Stock)
issued on a bonus basis under this Section 8 may be issued for no cash
consideration. Stock (including securities convertible into Stock)
purchased pursuant to a purchase right awarded under this Section 8
shall be priced at least 85% of the Fair Market Value of the Stock on
the date of grant.
SECTION 9. AWARDS TO OUTSIDE DIRECTORS.
(a) The provisions of this Section 9 shall apply only to awards to
Outside Directors in accordance with this Section 9. The Committee shall have no
authority to determine the timing of or the terms or conditions of any award
under this Section 9.
(b) On the date of each Annual Meeting of Stockholders of the
Corporation, commencing with the 1996 Annual Meeting of Stockholders, each
Outside Director will receive an automatic grant of restricted stock pursuant to
this Section 9 (the "Outside Directors Restricted Stock") in a number of shares
of stock which will be determined by dividing:
(i) $10,000 by
(ii) the average of the daily closing bid price of the
Stock for the first five (5) trading days of the
month in which the Annual Meeting is held (as
reported in The Wall Street Journal), rounding up or
down any fractional share of Stock to the nearest
whole share.
The Outside Director Restricted Stock award shall be adjusted annually on the
date of the Annual Meeting of Stockholders by the percentage change from the
previous year in the Consumer Price Index, Urban Wage Earners and Clerical
Workers (1982-1984 = 100), All Cities Average; provided, however, that such
annual increase shall not exceed six percent.
(c) The Outside Director Restricted Stock shall vest as follows:
(i) Of the aggregate number of shares of Outside Director
Restricted Stock granted on the date of each Annual
Meeting of Stockholders, one-third of the Outside
Director Restricted Stock shall immediately vest on
the date of grant;
12
(ii) At the first Annual Meeting of Stockholders following
the Annual Meeting at which the Outside Director
Restricted Stock was granted, if the grantee is still
serving as a director of the Corporation, the Outside
Director Restricted Stock shall vest with respect to
one-half of the remaining shares of the Outside
Director Restricted Stock; and
(iii) At the second Annual Meeting of Stockholders
following the Annual Meeting at which the Outside
Director Restricted Stock was granted, if the
director is still serving as a director of the
Corporation, the Outside Director Restricted Stock
shall vest with respect to the remaining shares of
the Outside Director Restricted Stock.
(d) Until the earlier of (i) five years from the date of grant and (ii)
the date on which the Outside Director ceases to serve as a director of the
Corporation (the"Outside Director Period of Restriction), no Outside Director
Restricted Stock may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution.
Each certificate representing Outside Director Restricted
Stock granted pursuant to this Section 9 shall bear the following legend:
"The sale or other transfer of the shares represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the American
Healthcorp, Inc. 1996 Stock Incentive Plan (the "Plan"), and rules of
administration adopted pursuant to such Plan. A copy of the Plan and
the rules of such Plan may be obtained from the Secretary of American
Healthcorp, Inc."
Once the Outside Director Period of Restriction has lapsed, the grantee shall be
entitled to have the legend required by this Section 9 removed from such stock
certificate(s); provided however, that such certificate shall be subject to any
legend required by applicable state or federal law.
(e) From the date on which the Outside Director Restricted Stock is
granted, grantees awarded such Stock may exercise full voting rights with
respect to the Outside Director Restricted Stock.
(f) Grantees holding Outside Director Restricted Stock that has vested
in accordance with Section 9(c) hereof, shall be entitled to receive all
dividends and other distributions paid with respect to such shares of Stock
while they are so held. If any such dividends, or distributions are paid in
Stock, such shares of Stock shall be subject to the same restrictions on
transferability as the shares of Outside Director Restricted Stock with respect
to which they were paid.
(g) Grantees of Outside Director Restricted Stock shall enter into a
Restricted Stock Award Agreement with the Corporation setting forth the
restrictions imposed on the Stock granted to him or her.
(h) All restrictions imposed on the Outside Director Restricted Stock
shall expire automatically upon a Change in Control, but shall not otherwise be
subject to Section 10 hereof.
(i) All shares of Outside Director Restricted Stock which have not
vested in accordance with Section 9(c) hereof, at the time of a grantee's
resignation, removal or failure to be elected as a member of the Board of
Directors shall be forfeited and such forfeited shares shall again be available
for award hereunder.
(j) The Board may not amend or alter this Section 9, except as provided
in Section 11, without the approval of the holders of a majority of the issued
and outstanding shares of Common Stock, and in no event shall
13
this Section 9 be amended more than once every six months, other than to comply
with changes in the Exchange Act, Code or the Employee Retirement Income
Security Act of 1974, as amended, or the regulations thereunder.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section 10(b) or
(2) a "Potential Change in Control" as defined in Section
10(c), but only if and to the extent so determined by the Committee or
the Board at or after grant (subject to any right of approval expressly
reserved by the Committee or the Board at the time of such
determination),
the following acceleration and valuation provisions shall apply if so determined
by the Board in its sole discretion:
(i) Any Stock Appreciation Rights (including, without
limitation, any Limited Stock Appreciation Rights) outstanding
for at least six months and any Stock Option awarded under the
Plan not previously exercisable and vested shall become fully
exercisable and vested.
(ii) The restrictions applicable to any Restricted
Stock and Other Stock-Based Awards, in each case to the extent
not already vested under the Plan, shall lapse and such shares
and awards shall be deemed fully vested.
(iii) Except as otherwise provided in Section
10(a)(iv) below, the value of all outstanding Stock Options,
Stock Appreciation Rights, Restricted Stock and Other
Stock-Based Awards, in each case to the extent vested, shall,
unless otherwise determined by the Committee in its sole
discretion at or (except in the case of an Incentive Stock
Option) after grant but prior to any Change in Control, be
cashed out on the basis of the "Change in Control Price" as
defined in Section 10(d) as of the date such Change in Control
or such Potential Change in Control is determined to have
occurred or such other date as the Committee may determine
prior to the Change in Control.
(iv) In the case of any Stock Options, Stock
Appreciation Rights, Restricted Stock and Other Stock-Based
Awards held by any person subject to Section 16(a) of the
Exchange Act, the value of all such Stock Options, Stock
Appreciation Rights, Restricted Stock or Other Stock-Based
Awards, in each case to the extent that they are vested and
have been held for at least six months, shall (unless
otherwise determined by the Committee in its sole discretion)
be cashed out on the basis of the "Change in Control Price" as
defined in Section 10(d) as of the date of such Change in
Control or such Potential Change in Control is determined to
have occurred, but only if the Change in Control or Potential
Change in Control is outside the control of the grantee for
purposes of Rule 16b-3(e)(3) under the Exchange Act, or any
successor provision promulgated by the Securities and Exchange
Commission.
(b) Definition of Change in Control. For purposes of Section
10(a), a "Change in Control" means the happening of any of the following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Exchange Act, other than
the Corporation or a wholly-owned subsidiary thereof or any
employee benefit plan of the Corporation or any of its
Subsidiaries, becomes the beneficial owner of the
Corporation's securities having 35% or more of the combined
voting power of the then outstanding securities of the
Corporation that may be cast for the election of directors of
the
14
Corporation (other than as a result of an issuance of
securities initiated by the Corporation in the ordinary course
of business); or
(ii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sales of assets or contested election, or any
combination of the foregoing transactions, less than a
majority of the combined voting power of the then outstanding
securities of the Corporation or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Corporation or such other corporation or
entity after such transaction are held in the aggregate by the
holders of the Corporation's securities entitled to vote
generally in the election of directors of the Corporation
immediately prior to such transaction; or
(iii) during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Board cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Corporation's stockholders, of each director
of the Corporation first elected during such period was
approved by a vote of at least two-thirds of the directors of
the Corporation then still in office who were directors of the
Corporation at the beginning of any such period.
(c) Definition of Potential Change in Control. For purposes of
Section 10(a), a "Potential Change in Control" means the happening of any one
of the following:
(i) The approval by stockholders of an agreement by
the Corporation, the consummation of which would result in a
Change in Control of the Corporation as defined in Section
10(b); or
(ii) The acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group (other
than the Corporation or a Subsidiary or any Corporation
employee benefit plan (including any trustee of such plan
acting as such trustee)) of securities of the Corporation
representing 5% or more of the combined voting power of the
Corporation's outstanding securities and the adoption by the
Committee of a resolution to the effect that a Potential
Change in Control of the Corporation has occurred for purposes
of this Plan.
(d) Change in Control Price. For purposes of this Section 10,
"Change in Control Price" means the highest price per share paid in any
transaction reported on the Nasdaq Stock Market or such other exchange or market
as is the principal trading market for the Stock, or paid or offered in any bona
fide transaction related to a Potential or actual Change in Control of the
Corporation at any time during the 60 day period immediately preceding the
occurrence of the Change in Control (or, where applicable, the occurrence of the
Potential Change in Control event), in each case as determined by the Committee
except that, in the case of Incentive Stock Options and Stock Appreciation
Rights relating to Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the optionee exercises such Stock
Appreciation Rights or, where applicable, the date on which a cash out occurs
under Section 10(a)(iii).
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee or participant under a Stock Option, Stock Appreciation Right,
Restricted Stock, Other Stock-Based Award or Outside Director Restricted Stock
theretofore granted, without the optionee's or participant's consent or which,
without the approval of the Corporation's stockholders, would:
15
(a) except as expressly provided in this Plan, increase
the total number of shares reserved for the purpose of the Plan;
(b) materially increase the benefits accruing to
participants under the Plan; or
(c) materially modify the requirements as to eligibility
for participation in the Plan.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority
to amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
SECTION 12. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Corporation, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to awards hereunder; provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
SECTION 13. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option or other award under the Plan to represent to and agree with the
Corporation in writing that the optionee or participant is acquiring the shares
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock or other securities delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed, and any applicable Federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(c) The adoption of the Plan shall not confer upon any employee of the
Corporation or any Subsidiary or Affiliate any right to continued employment
with the Corporation or a Subsidiary or Affiliate, as the case may be, nor shall
it interfere in any way with the right of the Corporation or a Subsidiary or
Affiliate to terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall pay to
16
the Corporation, or make arrangements satisfactory to the Committee regarding
the payment of, any Federal, state, or local taxes of any kind required by law
to be withheld with respect to such amount. The Committee may require
withholding obligations to be settled with Stock, including Stock that is part
of the award that gives rise to the withholding requirement. The obligations of
the Corporation under the Plan shall be conditional on such payment or
arrangements and the Corporation and its Subsidiaries or Affiliates shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock (or other types of Plan awards) at
the time of any dividend payment shall only be permissible if sufficient shares
of Stock are available under Section 3 for such reinvestment (taking into
account then outstanding Stock Options and other Plan awards).
(f) The Plan and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
(g) The members of the Committee and the Board shall not be liable to
any employee or other person with respect to any determination made hereunder in
a manner that is not inconsistent with their legal obligations as members of the
Board. In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence or misconduct in the performance of his duties; provided that
within 60 days after institution of any such action, suit or proceeding, the
Committee member shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
(h) In addition to any other restrictions on transfer that may be
applicable under the terms of this Plan or the applicable award agreement, no
Option, Stock Appreciation Right, Restricted Stock award, or Other Stock-Based
Award or other right issued under this Plan is transferable by the participant
other than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined under the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended. The designation of
a beneficiary will not constitute a transfer.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of the date of approval of the Plan by a
majority of the votes cast by the holders of the Corporation's Stock.
SECTION 15. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock award,
Other Stock-Based Award or Outside Director Restricted Stock award shall be
granted pursuant to the Plan on or after October 25, 2011, but awards granted
prior to such tenth anniversary may be extended beyond that date.
17